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Tag: Treasury Department

  • Regulators Shut Down Signature Bank

    Regulators Shut Down Signature Bank

    Regulators have shut down Signature Bank, the third bank in the last week, citing “systemic risk.”

    The last few days have been difficult for banks, especially those servicing the tech industry. Silicon Valley Bank has been in the news as the second-largest bank collapse in US history. With the financial downturn, tech customers withdrew enough funds to help cause a run on the bank, leading to its collapse. Regulators see the same kind of risk with Signature Bank, leading them to shut it down.

    A joint statement by Treasury, Federal Reserve, and FDIC announced the closure:

    We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

    Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

    Regulators did reaffirm that Silicon Valley Bank depositors will have access to their money on Monday:

    After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

  • US Gross National Debt Hits Record $31 Trillion

    US Gross National Debt Hits Record $31 Trillion

    The United States national debt hit a new milestone, crossing $31 trillion at a time when the economy is in a major downturn.

    The US has been carrying trillions in debt for years, leading to near-yearly debate among politicians about whether to raise the debt ceiling. The debates are likely to become even more fiery on news that the US debt has hit a record-breaking $31 trillion.

    The news was part of a Treasury Department report, and raises concerns at a time when the US and the world are facing some of the worst economic uncertainty in more than a decade. The concerns over the current debt situation are exacerbated by increased interest rates, despite the rate hikes being a necessary step to help stem rising inflation.

    “So many of the concerns we’ve had about our growing debt path are starting to show themselves as we both grow our debt and grow our rates of interest,” said Michael A. Peterson, the chief executive officer of the Peter G. Peterson Foundation, according to The New York Times. “Too many people were complacent about our debt path in part because rates were so low.”

    Only time will tell if lawmakers will be able to take steps to reduce the debt.

  • IRS Backtracks, Ends Bid to Require Facial Recognition

    IRS Backtracks, Ends Bid to Require Facial Recognition

    The IRS is backtracking on its plans to require facial recognition to access online accounts, following backlash from security and privacy experts.

    The IRS announced in mid-January that it was partnering with ID.me, with plans to require facial recognition for users accessing their online accounts. As Krebs on Security documented, the process involved in setting up facial ID was relatively complicated. Meanwhile, security experts and customers worried about the implications of people’s biometric data being collected.

    According to The New York Times, the Treasury Department is now abandoning the plan, despite awarding ID.me an $86 million contract.

    “The I.R.S. takes taxpayer privacy and security seriously, and we understand the concerns that have been raised,” said Charles P. Rettig, the agency commissioner. “Everyone should feel comfortable with how their personal information is secured, and we are quickly pursuing short-term options that do not involve facial recognition.”

    The agency is evidently working on an alternative method of identification that will not involve facial recognition, although it’s unclear at this time what that method may be.

  • Xiaomi Sues US Government In Effort to Overturn Ban

    Xiaomi Sues US Government In Effort to Overturn Ban

    Xiaomi is suing the US Treasury Department and the Department of Defense in an effort to overturn a Trump administration ban.

    Xiaomi, along with Huawei and ZTE, were banned by the Trump administration over national security concerns. Xiaomi was accused of having close ties with the People’s Liberation Army.

    The company is now challenging the ban, according to Bloomberg, suing the US Treasury and Defense departments.

    “Xiaomi faces imminent, severe, and irreparable harm if the Designation remains in place and the restrictions take effect,” the company said in its court filing, naming Defense Secretary Lloyd Austin and Treasury Secretary Janet Yellen as defendants.

    It remains to be seen what action the Biden administration will take against Chinese firms, and whether it will uphold past action. It’s clear, however, that Xiaomi is testing the waters to see if the the change of administration will result in a change of policy.

  • Robinhood Blocks GameStop Trading, Faces Backlash

    Robinhood Blocks GameStop Trading, Faces Backlash

    Robinhood has weighed in on the war on Wall Street, blocking buys of GameStop, AMC, Blackberry and others, and facing backlash for it.

    Day traders have been waging war against Wall Street, targeting stocks institutional investors have recommended shorting. The traders have been using Reddit to encourage others to buy those stocks, pumping them to record heights. GameStop surged as high as $247 from the $18 it was sitting at a couple of weeks ago.

    The end result has been staggering losses by Wall Street investors who had shorted those stocks, in many cases being forced to buy them back at much higher prices. The situation has even caught the attention of the White House and Treasury Department.

    Meanwhile, Wall Street investors have denounced the phenomenon, saying it’s not based on facts or the merits of the companies’ performance. Instead, the situation seems to be the latest example of community activism, fueled by frustration over how established institutions have done business.

    Reddit co-founder Alexis Ohanian, Sr. made that point on Twitter:

    Stock trading app Robinhood has taken action, blocking trades of $AAL, $AMC, $BB, $BBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. Needless to say, users are outraged, with some filing SEC complaints and others jumping ship for competing platforms, such as CashApp.

    Robinhood may find itself reaping the same collective whirlwind Wall Street has been on the receiving end of, hurting its own business.

  • Day Traders Continue to Pump Stocks, WH and Treasury Monitoring

    Day Traders Continue to Pump Stocks, WH and Treasury Monitoring

    Day traders continued to take on Wall Street investors, pumping stocks traditional investors have been shorting.

    GameStop made headlines when its stock surged after Citron Research’s Andrew Left urged investors to short it. Traders took to Reddit to urge others to buy, causing the stock to hit as high as $247 in after hours trading Tuesday, a far cry from the $18 it was at a couple of weeks ago.

    GameStop isn’t the only company to see its stock take off. AMC has risen some 310%, Blackberry 24% and Bed Bath & Beyond 46%, according to Business Insider. It appears that day traders are engaging in a new level of activism, targeting stocks that institutional investors are shorting. The end result is volatile trading that has caused traditional investors to suffer heavy losses.

    The situation is not going unnoticed, with WH Press Secretary Jen Psaki saying the White House and Treasury Department were monitoring the situation.

  • Jeremy Allaire: Breaking News From US Treasury – Banks Can Use Public Blockchains

    Jeremy Allaire: Breaking News From US Treasury – Banks Can Use Public Blockchains

    The U.S. Department of Treasury is now going to allow banks to treat public chains as infrastructure similar to SWIFT, ACH and FedWire, and stablecoins like USDC as electronic stored value. Jeremy Allaire, the CEO of Circle, says that the significance of this can’t be understated.

    Jeremy Allaire, Co-Founder, Chairman and CEO at Circle, discussed the announcement on his Twitter last night:

    1/ Breaking major news from US Treasury OCC, the largest US banking regulator (@USOCC), with new guidance allowing US banks to use public blockchains and dollar stablecoins as a settlement infrastructure in the US financial system. https://occ.gov/news-issuances/news-releases/2021/nr-occ-2021-2.html

    2/ This is a huge win for crypto and stablecoins – $USDC

    3/ The new interpretive letter establishes that banks can treat public chains as infrastructure similar to SWIFT, ACH and FedWire, and stablecoins like USDC as electronic stored value. The significance of this can’t be understated.

    4/ Decentralized, permissionless, open source and internet mediated software is literally becoming the foundation for not just the US financial system but for the global economy.

    5/ We are on a path towards all major economic activity being executed on-chain. It is tremendous to see such forward thinking support from the largest regulator of national banks in the United States.

    6/ This paves the way for the use of leading dollar digital currencies such as USDC as a mainstream payment medium for all forms of payments and settlement, and helps put the US in a leadership position in embracing the power of public blockchains.

    7/ Beyond payments and settlement, and unlike legacy settlement mediums, public chains combine transactions and compute, enabling a radically new modes of financial and commerce apps to be built.

    9/ It also sets the stage for more regulated financial institutions to run blockchain nodes, and even become validators.

    10/ This is a HUGE way to start 2021, the year that crypto and stablecoins go mass market!

  • Organizations Compromised in SolarWind Supply Chain Attack

    Organizations Compromised in SolarWind Supply Chain Attack

    FireEye has uncovered a sophisticated intrusion campaign against government and corporate organizations, using a supply chain attack.

    Supply chain attacks are one of the most sophisticated types of hacks in existence. While many hacks rely on convincing a target to download malicious software, a supply chain attack involves inserting malicious code in legitimate software before it’s distributed to customers, hence attacking the software supply chain.

    The attack in question uses a compromised update to SolarWind’s Orion IT monitoring and management software, with FireEye calling the compromised version “SUNBURST.” The trojanized version is incredibly sophisticated, using various methods to avoid detection, all the while communicating with third-party servers.

    “After an initial dormant period of up to two weeks, it retrieves and executes commands, called “Jobs”, that include the ability to transfer files, execute files, profile the system, reboot the machine, and disable system services,” writes FireEye’s team. “The malware masquerades its network traffic as the Orion Improvement Program (OIP) protocol and stores reconnaissance results within legitimate plugin configuration files allowing it to blend in with legitimate SolarWinds activity. The backdoor uses multiple obfuscated blocklists to identify forensic and anti-virus tools running as processes, services, and drivers.”

    The trojan has enabled hackers to monitor email communications at the US Treasury and Commerce departments, according to Reuters. FireEye says victims have also “included government, consulting, technology, telecom and extractive entities in North America, Europe, Asia and the Middle East.” Since the attack is actively in progress, FireEye suspects there will be additional victims as well.

    To mitigate the attack, “SolarWinds recommends all customers immediately upgrade to Orion Platform release 2020.2.1 HF 1, which is currently available via the SolarWinds Customer Portal. In addition, SolarWinds has released additional mitigation and hardening instructions here.”

    If an organization is not able to update, FireEye has outlined additional mitigation steps that should be taken.